Question

Preparing a Budgeted Income Statement Oliver Company provided the following information for the coming year: Units produced and sold 160,000 Cost of goods sold per unit $6.30 Selling price $11 Variable selling and administrative expenses per unit $1.10 Fixed selling and administrative expenses $423,000 Tax rate 18 % Required: Prepare a budgeted income statement for Oliver Company for the coming year. Round all income statement amounts to the nearest dollar. Oliver Company Budgeted Income Statement For the Coming Year Sales $
Cost of goods sold
Gross margin $
Less: Variable selling and administrative expenses
Less: Fixed selling and administrative expenses
Operating income $
Less: Income taxes
Net income $

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Units produced and sold 160,000 Cost of goods sold per unit $6.30 Selling price $11

Variable selling and administrative expenses per unit $1.10

Fixed selling and administrative expenses $423,000

Tax rate 18 %

Income Statement:

Sales= 160,000¨11= 1,760,000

COGS= 6.30*160,000= (1,008,000)

Gross profit= 752,000

Selling and administrative expense= (160,000*1.10) + 423,000= (599,000)

Earning before taxes= 153,000

Tax= 153,000*0.18= (27,540)

Net operating profit= 125,460